Washington Health Policy Week in Review is a weekly newsletter that offers selected stories from the daily newsletter CQ HealthBeat.

Medicare Agency Will Briefly Delay Cuts in Doctor Payments

By Emily Ethridge, CQ Staff

May 28, 2010 -- With a 21-percent payment cut slated to take place June 1 for doctors who see Medicare patients, the Centers for Medicare and Medicaid Services has notified physicians that it will delay processing claims for two weeks.

Efforts to prevent the cuts before the deadline have run out of time. The House on Friday approved a $22.9 billion provision in a package of tax and benefit extensions that would block the cuts through the end of 2011 and provide physicians a small increase each year. The vote was 245-171, largely along party lines.

But the Senate is not expected to address the extenders package until June 7 at the earliest.

CMS told its contractors to hold claims for Medicare reimbursement for 10 business days "to avoid disruption in the delivery of health care services to beneficiaries and payment of claims for physicians," the agency said in a letter to providers.

That buys Congress some time to prevent physicians from feeling the cuts, but not much. On June 14, CMS contractors will process claims for physician services performed June 1 — the first day doctors will see the 21 percent cuts mandated under the formula used to pay providers who see Medicare patients.

Michael C. Burgess, R-Texas, who is a physician, and who voted for the extension, said the planned processing delay would offer little comfort to physicians with small practices. "Do you know what happens when you hold a check in a one- or two-doctor office for two weeks?" he asked. "That doctor doesn't have a paycheck at the end of the month — their margins are so tight."

When senators return in June, they are expected to offer amendments to the extenders package that contains the 19-month "doc fix." Any changes prior to Senate passage would send the bill back to the House for another vote.

AARP Executive Vice President Nancy LeaMond urged the Senate to take up the bill immediately after the recess.

"Older Americans — and the physicians who treat them — should not continue to be held hostage by Band-Aid patches to an unworkable sustainable growth rate formula," LeaMond said.

Under the House-passed measure, physicians would receive a 2.2 percent payment increase for the remainder of 2010 and an additional 1 percent increase in 2011. After that, payment rates would return to the current sustainable growth rate formula, widely viewed as flawed — setting up a 33 percent cut in the 2012 payment.

"The truth is we should be doing a lot more than this. We need a permanent fix," said Energy and Commerce Chairman Henry A. Waxman, D-Calif.

Ways and Means Ranking Republican Dave Camp of Michigan blamed the Democratic leadership for failing to secure a permanent solution, blasting "a fix that expands the deficit by $22.9 billion, kicks the can 19 months down the road, has doctors facing a 33 percent cut in 2012, and will force us to spend billions more," he said.

The American Medical Association (AMA), a physician interest group, slammed the Senate for leaving town without addressing the cuts.

"Senators are more interested in heading home for the holiday than in preventing a Medicare meltdown for seniors," said AMA President J. James Rohack. "The 21-percent Medicare physician payment cut has been looming all year, and yet all Congress has managed to do is repeated short-term delays. This is a complete mismanagement of a health care program that America's seniors and the disabled rely on."

American College of Cardiology CEO Jack Lewin called the delay "the worst-case scenario" for patients and providers. "Medicare shouldn't be a political football held captive to election year politics," Lewin said. "This Band-Aid approach is fiscally irresponsible and does nothing to control the costs of Medicare."

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